Water & Wastewater Treatment Magazine
Issue link: https://fhpublishing.uberflip.com/i/917367
20 | JANUARY 2018 | WWT | www.wwtonline.co.uk The self-lay market: a north-south divide in competitive activity T he fortunes of self-lay providers – companies which will lay new water mains on behalf of developers – in different parts of the country is revealing about the patchiness of efforts to overcome barriers and encourage a competitive market in this area. United Utilities and Severn Trent are recognised as being particularly open to self-lay, but there is very little traction for SLPs around London and the south east: a true north-side divide, notes Martyn Speight of self-lay trade association Fair Water Connections. "The market really become established in UU's area, and about 60% of their connections are done by self-lay," says Speight. "When you consider that many of the others are individual properties, flats and apartments on existing highways, or smaller sites that aren't that attractive to independent providers, you would say that the market there is saturated. But if you go down to the south-east of England, the figure is about 5%. Understanding why that has not been addressed in the south of Britain is difficult and that's the challenge to take forward." The Works: developer services He explains how slow response times and obscure charging structures can put off developers from pursuing the self-lay option. "What usually happens is that developers might have a rough idea of how they want the site supplied early on, but they don't make a decision until later when they start to commit expenditure to that site. Now, if response times from the water company at that stage aren't particularly fast because of the complicated charging process that's been in place, developers have tended to choose the safe option in terms of going to the water company, rather than looking to the open market." Having an upfront schedule of charges from the water company should enable developers to make a decision about water supply at an earlier stage, says Speight. Furthermore, the requirement that all non-site-specific work such as network reinforcement should be paid for by the infrastructure charge should overcome the perception that many developers had in the past that they were being charged twice for such work. "The issue with infrastructure charges has been that nobody is totally certain what they fund," says Speight. "You can end up with sites where you pay infrastructure charges, but you also pay for a lot of mains work which could mean going right back to the source works. So in that instance, why are you paying infrastructure charges to enhance the current network? That will all disappear under the new arrangements." However, he is concerned that water companies may respond to the reforms by increasing infrastructure charges; Anglian Water, for example, has stated an intention to increase the charge by £90. This would be "swings and roundabouts" to a larger developer but would tend to hit smaller customers, he says. He also says he is yet to see evidence that subsidies and discounts that are paid by water companies to take account of future income from new connections (income offset) will be dealt with fairly; or that the information that water companies give on their websites about connections will make it sufficiently clear that there is a self-lay option. • SELF-LAY